Houston Wire & Cable Company announced operating results for the first quarter of 2013. The results include a 2 percent growth in sales, debt reduction and an increased dividend to $0.11 per share.
Jim Pokluda, President and Chief Executive Officer commented, “Inconsistent market conditions, and varying levels of regional performance generated sales which grew approximately 2% over the prior year period when adjusted for the reduction in the price of metals. Weakness in certain geographic regions was offset by strong demand in upstream and midstream oil and gas markets and increased industrial demand in the Gulf Coast region. Overall, MRO demand was up slightly while project activity was down slightly.”
“Sales of recently introduced new products such as specialty oil and gas cables and aluminum cables continued to drive performance. Operating cash flow was solid and debt reduction exceeded expectations. Similar to prior quarters, our largest markets performed well and we remain positive in our view that sales and profitability will continue to slowly improve throughout the year.
Gross margin increased to 22.7% as a result of a change in product sales mix. Operating expenses were up $0.7 million or 4.6%, due primarily to additional headcount, principally in sales and marketing. This increase compressed operating margins, which fell to 6.8%, down 40 basis points from 2012.
Interest expense of $0.3 million was flat with the prior year period. An 18% reduction in outstanding debt reduced the balance to its lowest quarterly level since December 2011. The average effective interest rate declined by 9.5%, from 2.1% in 2012 to 1.9% in 2013.
Net income of $3.9 million decreased by 3.8% or $0.2 million from the first quarter of 2012. Diluted earnings per share were $0.22 compared to $0.23 in the comparative year period.
Pokluda further commented, “We are very pleased our strong balance sheet and solid financial performance allowed us to increase our dividend 22.2% to $0.11 per share.”
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